China's Role in the Post 2008 Economy

The see saw economy is designed in such a way as to create profitable opportunities.

China's economy mushrooms year by year while the rest of the world struggles on or contracts.

Huge amounts of manufactured goods are pouring out of China, that is, if the world can afford to pay considering high unemployment and cut backs in Europe and the States.

Raw logs leave Canada and finished furniture arrives back in Canada at prices that are lower than for an equivalent amount of building lumber in Canada.

The ubiquitous "Made in China" sticker shows up on almost everything these days. Sometimes there are product recalls due to cadmium or lead risks, hinting at issues in China over health and safety.

Many factories have been closed and are now abandoned in the US, Canada and Europe. Does it look strangely familiar? It should! A similar thing happened in the "dirty 30s".

Work camps like this sprang up all over the US and Canada at various times. One such event was under the "New Deal" of Roosevelt that put the unemployed to work in parks and infrastructure.

During WWII, Japanese citizens of the US and Canada were interred in camps. They didn't just sit there; they were put to work. Before entry, they were stripped of everything they owned.

This sign over a Nazi work camp in the early 1940's that translates to "Work makes free" was an evil blot on history that unfortunately has the potential to repeat.

China's juggernaut made in the US and Europe economy is no accident

It is
interesting to note that as the US economy contracted violently, the
Chinese economy spurted upward at an amazing 10.1 percent for 2009.
Initial estimates put the expansion at 6 percent. Initially China
experienced 10 million unemployed at the outset of the collapse in
late 2008. By and large, these unemployed have been re-absorbed in
the workforce due to the expansion. In the US, unemployment increased
by a similar amount, raising the level of US unemployment to 10 to 20
percent depending on who you source. But why did China's economy
mushroom when the rest of the world shrank? The clue lies in the way
that the capitalist economy works.

In order
to increase profits, costs must be cut in every way possible. This is
done by means of increasing mechanization, cutting wages, eliminating
unions, avoiding environmental costs, neglecting safety and health
issues and increasing productivity. In the US the costs are high, so
prices on commodities must rise in order to obtain that elusive
profit. But rising prices make for less sales and shrinking profits.
This is especially true if the capitalist is also relying on foreign
sales where incomes is much lower and people look to lower priced
commodities. It is a classic contradiction.

The
international bourgeoisie have organized the world and distorted
workers' states such as China with their economic influence. Under
the Chinese revolution led by Mao Tse Dung, the workers' state was
born deformed. Though the people gained things like universal medical
care, housing, education and jobs, the deformity of the bureaucratic
body politic was open to making deals with capital. This was made
plain what Mao Tse Dung shook hands with Richard Nixon. This single
act dealt a death blow to Maoist organizations around the world and
Maoism suffered a near death blow. However, deformed as the Chinese
revolution was, the gains were made by the proletariat. Under most of
China, the benefits of the revolution have been maintained to the
present day. For many Chinese, the quality of life has generally
improved, despite huge changes all over China that uprooted tens of
millions.

When
Britain gave up the colonial rule of Hong Kong in 1999, the Chinese
bureaucrats took over, but left capitalist interests intact. This is
how capitalism got a foothold in China and spread its influence into
the mainland and economy. Chinese bureaucrats did not end the planned
economy so much as using the capitalist world to fuel an expanding
economy. Chinese interests in growth to improve their own economy
meant that the fast road to development was taken, sacrificing
safety, health and the environment. This was crucial for US
investment as the US economy and capitalists were saddled with the
costs of safety, high wages, unions and environmental restrictions.

The best
way to shift from high costs to low costs to boost profit is to rig
the economy at home to collapse so that production forces could be
shifted elsewhere to manufacture commodities at a much lower cost.
The checks and balances placed in the US economy after the great
depression were dismantled under Ronald Reagan's presidency under the
real voodoo economics. Taxes were lowered while costs of government
went up. Controls on investment were deregulated allowing for
increasing market speculation. Banking that was strained to the limit
was given the power of fractional reserve banking. A hint of what the
future would bring was revealed in the Clinton Whitewater land
scandal. The stage was set for the planned collapse of the economy.

The
current crisis has its roots as far back as 2004, but the real state
of things became apparent in 2006 and matured in September 2008. From
then to now, workers were laid off in the millions. Even though the
auto union was forced to enforce huge wage cuts, the big auto
producers went bankrupt and needed bailout money from the Obama
government in 2009. Despite this, most auto workers lost their jobs
anyway, and this fueled the ongoing mortgage foreclosure crisis and
accumulating "toxic assets". Meanwhile, jobs moved offshore
to China's capitalist sector that had no environmental protection
laws, low wages, no regulation of safety and health standards in
manufacture and a huge, cheap workforce that was unemployed in the
initial stages of the world economic collapse triggered by the US
when the hyperinflated real estate bubble burst.

When
jobs disappeared in the US, Canada and Europe; they re-emerged in
China and also in India. News shipped out from China from two sources
tells us that there are no environmental or safety or health
standards. Wages for making automobiles are $100 per month on average
in China versus up to $90 per hour in the US. What a saving for world
capitalism! In addition, China developed an appetite for US, Canadian
and European electronic garbage and recycled metals. These were
shipped over by the freighter full to be prossessed with no
environmental regulations or safety considerations. Thus the green
awareness of the developed world was bought by the lack of
environmental controls in China. Jobs exploded by way of opportunity
in China while they evaporated in the rest of the world. The jobs
were mainly in secretive recycling facilities in mainland China that
were funneled through Hong Kong. Costs were slashed, even though
there was a vast shipping distance involved. Finished product was
shipped back, but with the high unemployment, there were fewer sales.
But in China, the juggernaut economy picked up the slack were Chinese
people got very car and electronic commodity hungry.

In all
of this the environment was ignored despite public relations. Out of
China is emerging a phenomena of brown clouds and global dimming. It
is coming out of India too, but no where near the volume that emerges
from China. China is also a number one customer for US coal and much
of their power is produced using coal. The world has received a
double whammy in the form of cheap labor and escalating pollution.
All of it was planned; not accidental as thought. The swiftness in
which this all unfolded, indicates a well planned event. There are
too many parallel and simultaneous developments.

What is
the future for Europe, the US, Canada, Australia and Japan? If we are
to take the past response in Canada and the US as a measure, there
are work camps for the millions of unemployed with deplorable working
conditions, shabby housing, poor and limited food, and low, low pay.
These conditions were written about in John Steinbeck's Grapes of
Wrath and are also told by those two people who still survive in
Canada who made the “on to Ottawa trek” in 1935 and were met with
violent suppression. The future is also indicated by what has
happened in the past in Peenumunde and Mittlewerk if the current
trend continues, but within a poisoned planet. Many hope that this is
not so, but if nothing is done and we continue to live in fantasy
land, then these things must unfold according to the formula of
profit making.

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